The federal government has received the report of the compensatory contracts and other incentives committee on the abandoned $1 billion Kaztec Engineering Limited (KEL) fabrication yard, located in Ilase village, Snake Island, Amuwo-Odofin Council, Lagos State.
Senator Magnus Abe, the Chairman of the Committee and Member of the Board of the Nigerian National Petroleum Corporation (NNPC), who submitted the report to the Minister of State, Petroleum, Mr. Timipre Sylva, in Abuja, described the assignment as sensitive.
He explained that the federal government would not sit by and allow such humongous waste of resources on the project, stressing that aside the 3,000 jobs lost to the collapse of the facility, over $650 million had already been expended on the abandoned project.
He noted that the facility was to add over 19 million barrels to the national oil reserve before Addax Petroleum declared a force majeure on the project which has not been operational since 2015 due to contractual issues.
The facility was designed to make it the first wholly indigenous engineering, procurement, fabrication, and offshore installation company to deliver complex offshore and onshore oil and gas projects until the operational challenges occurred.
“This has been a very sensitive assignment. This committee was inaugurated 14 August last year and we sought an extension and we have finished our task, submitted our interim report. But we thought the public needed to know what is happening on this project.
“In keeping with that, we thought we needed a formal report. It is important that Nigerians realise what happened on this project. As we speak, this was a project that was to extract or add 19 million barrels to our existing reserves and would have been part of the daily national production.
“After that project was ready and everything was in place, contracts had been awarded and close to $1 billion had been invested in it, addax petroleum called a force majeure on issues that were totally unrelated to this particular project at hand,” he lamented.
He noted that the action put over 3,000 Nigerians out of work and wasted hard earned foreign currency that the country would have used for other things, adding that, “Nigerians will weep over what happened there,” when allowed to visit the site.
He said Nigerians ought to know the extent of damage that was done not only to the indigenous oil company, but to the economic interest of the country.
He stated that not only were the workers there affected, but a lot of jobs that were supposed to be done in-country that would have been useful even in the execution of other projects, were still being done abroad.
“As a result of that, the entire investment of the Nigerian company went to waste, more than, 3,000 laid off, ships were abandoned and the entire investment collapsed.
“So, when the president got wind of it, he set up this committee to go and find out the way it could help revitalise that project so that it isn’t lost or wasted. This project should not be abandoned,” he explained.
